TLDR
- D-Wave Quantum Inc. (QBTS) stock surged over 50% following strong Q1 2025 earnings report
- Company posted record $15 million revenue (507% YOY increase) and 93.6% gross margin
- D-Wave sold its first Advantage quantum computing system, a milestone achievement
- The company demonstrated quantum supremacy over classical supercomputers
- Despite progress, some investors remain cautious about the company’s long-term prospects
D-Wave Quantum Inc. (QBTS) has become a hot topic in the investment world after its stock price skyrocketed by 683% over the past year. The quantum computing company has created a sharp divide among investors, with bulls pointing to recent technological breakthroughs and bears warning about overvaluation.
The company’s recent first-quarter 2025 earnings report has given bulls plenty to cheer about. D-Wave posted record-breaking numbers across several key metrics.
Revenue jumped to $15 million, representing a massive 507% increase compared to the same period last year. This growth was largely driven by the first-ever sale of the company’s Advantage quantum computing system.
Gross margins reached an impressive 93.6%, up from 73% in the previous quarter and 67.3% in Q1 2024. This dramatic improvement shows the company’s ability to command premium pricing for its cutting-edge technology.
The earnings per share came in at -$0.02, which beat Wall Street expectations by $0.03. While still operating at a loss, this represents substantial progress toward profitability.
Technological Breakthroughs
D-Wave isn’t just improving financially—the company has made major technical strides as well. In a major accomplishment, D-Wave demonstrated quantum supremacy on a real-world magnetic simulation problem.
Using its 1,200-qubit Advantage2 prototype system, the company generated solutions faster than what would be possible on Frontier, currently the world’s leading supercomputer. This work gained scientific credibility when it was published in a peer-reviewed Science article in March.
The company also released research on quantum-powered blockchain hashing, showcasing the first demonstration of distributed quantum computing that simultaneously used four quantum systems. This innovation has reportedly generated strong interest from the blockchain industry.
These achievements push back against skeptics like NVIDIA CEO Jensen Huang, who suggested in January 2025 that useful quantum computers might be two decades away from reality.
D-Wave’s CEO, Dr. Alan Baratz, called the first sale of an Advantage system “a defining moment” for the company. Management also confirmed that the next-generation Advantage2 system remains on track for general availability by the end of Q2 2025.
The company’s cash position looks solid, with over $304 million in cash and equivalents on hand. D-Wave leadership has stated this is sufficient to support operations until the company reaches consistent profitability.
Cautionary Signals
Despite the positive earnings report, some warning signs remain for careful investors. Bookings—orders expected to generate future revenue—decreased by almost two-thirds year-over-year to $1.6 million.
The company’s customer base, while growing, still numbers just 133 clients. This relatively small pool could make D-Wave vulnerable to revenue volatility if key customers change their purchasing plans.
The stock’s current trading price of $10.87 exceeds the analyst consensus price target of $10.17, suggesting limited short-term upside potential according to some Wall Street experts.
However, not all analysts see it that way. Benchmark analyst David Williams, ranked in the top 3% of Wall Street experts, recently raised his price target from $8 to $14, suggesting the stock could climb another 30%.
Williams called the quarter “a validation of the company’s annealing approach, advancing technology roadmap, growing customer interest and commercial adoption momentum.”
The analyst community seems optimistic overall, with D-Wave receiving a Strong Buy consensus rating based on 5 Buy recommendations. The average price target stands at $12.80, pointing to potential one-year gains of 19%.
Short sellers have been making the case that D-Wave’s technology won’t deliver a quantum revolution and that its path to profitability is questionable. The latest earnings report directly challenges these assertions with concrete financial improvements.
D-Wave’s stock jumped about 50% in the days following its earnings release, showing strong investor confidence in the company’s direction. This represents a major turnaround after having a rough start to 2025 with the stock deep in the red year-to-date until the earnings announcement.
The Q1 financial results showed a net loss of $5.4 million, which represents an improvement of $11.9 million compared to the prior year’s quarter.
